Currency Note Euro

Eurozone data undermines the euro against sterling

By Smart Currency May 2nd, 2014

This week has been an eventful one in terms of data releases and rate changes relating to the single currency. The first significant movement in euro rates occurred on Tuesday following the release of key inflation data from Germany. Figures came through detailing an inflation rate of 1.1% in the Eurozone’s largest economy, 0.2% less than average expectations. This caused the eighteen-nation currency to weaken sharply against both the US dollar and sterling. On Wednesday, Consumer Price Index (CPI) data for the Eurozone as a whole also came through mildly worse than expected, but given the depreciation on the previous day, these figures were not badly received and put the euro back on an upward trajectory against most major currencies. These figures continued to have a positive effect on the euro as investors adopted the view that European Central Bank (ECB) President Mario Draghi was unlikely to implement any quantitative easing programme on the back of these figures.

This week has also been a busy week in the UK and the USA so we have seen considerable rate movements across the board. On the whole, the euro now looks to be in a weaker position against sterling, but a stronger position against the US dollar after a busy week of data releases in the wonderful world of currency.

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